Deutsche Bank downgrades Joby Aviation to Sell with risks overlooked

Deutsche Bank downgraded Joby Aviation (JOBY) to Sell from Hold with a price target of $4, down from $6. There are "important risks being overlooked" by the market and Joby’s premium valuation is "too lopsided" relative to peer Archer Aviation (ACHR), the analyst tells investors in a research note. Despite Joby being perceived as the leader in the industry, the developmental path of its electric vertical take-off and landing aircraft seems increasingly challenging as the aircraft is dealing with weight management issues, says the firm. It notes the current iteration being built is referred to as a "Company conforming" version and will not garner any real testing credit with the Federal Aviation Administration even when a pilot is onboard later this year. Deutsche recommends a pair trade of long Archer, its top pick in the space, and short Joby.